One of the world’s most successful hedge funds turned family office, Soros Fund Management, has promoted Ted Burdick as chief investment officer (CIO) five months after its top investor Scott Bessent left the family firm to launch his own $4.5-billion macro fund.
Formerly the head of distressed debt and arbitrage, Burdick’s promotion will make him the fund’s sixth CIO since 2000 – and the third to be recruited internally.
“Family offices tend to stick with guys they’ve worked with before and have proven track records,” says Tayyab Mohamed, director at family office advisory and recruitment firm Agreus.
Burdick, who started out as an analyst in London, has worked for Soros for over 15 years. The family office reportedly has $25 billion assets under management.
“Some of the longest standing CIOs in family offices have been there for decades and titles mean nothing,” Mohamed says. “Many chief investment officers I deal with started off as accountants and have just managed to prove themselves time and time again.”
Soros is known as “the man who broke the Bank of England” for his role in the Black Wednesday crisis in 1992, whereby he made $1 billion in a single day after short-selling the pound. It is widely considered the greatest financial trade in history.
He founded Soros Fund Management in 1969, but closed its doors to outside investors in 2011, becoming one of the first hedge funds to transition into a family office following the implementation of the Dodd-Frank Reform Act.
Tayyab Mohamed believes many more firms will choose to restructure and shed external clients over the next few years in order to escape regulatory pressures and avoid costs. “A lot of (family offices) are a four-man team affair, often managing in excess of $10 billion. Most of them no-one has ever heard of. They don’t have to be a regulated entity and they love it that way,” he says.
Family offices managed to escape many of the measures intended to restrict and monitor hedge fund activity, thanks in large part to the lobbying efforts of the Private Investors Coalition, which represents the interests of single family offices.
One former hedge funder may be bucking the trend, however. This month the Securities Exchange Commission settled a case against Steve A Cohen for failing to supervise against insider trading at his former hedge fund SAC Capital.
He had converted his fund into a family office, but from 2018 he will be allowed to trade external client funds again – an opportunity many believe he will take up.